Ask MoneySenseIf I convert, say, 50% of my RRSP to RIF, is the mandatory withdrawal calculation based on the converted 50% or the total (unconverted) RRSP and converted RIF? Does Canada Revenue Agency inform me how much I need to withdraw every year from my RIF?
—Jackie
Withdrawals from multiple registered accounts
I come across a lot of people who have had registered retirement savings plan (RRSP) accounts for 40 years and are unclear on how the withdrawal process works. So, your inquiry, Jackie, is a good one.
I will address your questions and explain a bit more about the tax and procedural considerations with registered account conversion.
RRSP withdrawal rules
You can take an RRSP withdrawal whenever you want. The only exception is with a locked-in RRSP that comes from a pension plan. You may not be able to take withdrawals prior to age 55, except for extraordinary circumstances that vary based on the province of the pension the funds were transferred from.
RRSP withdrawals are taxable…
Tax news in Canada
New capital gains inclusion rate: With its 2024–25 budget, the federal government announced that capital gains in excess of $250,000 per year would be subject to a 66.7% inclusion rate effective June 25, 2024. That’s up from the 50% that applied previously (and which still applies to your first quarter-million in yearly gains). However, with the prorogation of government and the fact that the actual amendment to the Income Tax Act bringing the rule into effect has not yet passed, many wondered if these changes would apply to your 2024 tax return…
